- The total value of the fund is BRL 5 million;
- The amounts invested in each startup vary depending on the stage of maturity of the startup’s product.
The Black Founders Fund, a Google for Startups initiative to invest in Black-founded and led startups has already selected nine Brazilian companies to invest in Brazil: Afropolitan, Aoca Game Lab, Creators, Easyjur, LegAut, Treinus, TrazFavela, Wellbe, and WeUse. The fund still wants to reach 30 investments by the end of 2021.
André Barrence, Director of Google for Startups in Latin America, told LABS that the initiative has no counterpart or shareholding. “The goal is to expand racial diversity in the startup ecosystem and support entrepreneurs who are building businesses with high growth potential,” he says.
The total value of the fund is BRL 5 million. According to Barrence, the amounts invested in each startup may vary depending on the stage of maturity of the startup’s product, the current needs of each one, and how much the startups are looking to raise in the round. In addition to the investment, companies participating in the program will receive “significant amount” in credits for products like Google Cloud and Google Ads, tools to develop the business, Barrence said.
Carlos Alberto Silva, CEO, and founder of WeUse said that the Black Founders Fund’s resource “comes at a crucial moment”, as due to the COVID-19 pandemic, the cost of acquiring WeUse customers has increased. “With this support from Google, we will be able to be more aggressive in marketing and make our startup better known, thereby increasing our subscriber base. Initiatives like this are essential to help startups, especially those led by Blacks, who generally have less access to investment, ”he told LABS.
The initiative was created in the United States and now has, in addition to the Brazilian arm, the European version of the fund. “All the startups in which we decided to invest are ready to take a next step in the growth of their business and we believe that Google’s contribution will be fundamental to this new cycle,” said Barrence.
According to Barrence, when Google started structuring the Black Founders Fund in Brazil, it identified an absence of Black founders and leaders in the startup ecosystem. In the Google for Startups Campus membership base, with more than 150,000 people integrated into Brazil’s technology and innovation ecosystem, there were nine times as many startup founders who claimed to be white than black, according to Barrence.
“Within the universe of founders, the number of white people who dedicate themselves full time to their startups is ten times higher than the number of Black people. These are some examples that illustrate the difference in opportunities, the origin of which is the systemic social and racial injustice that we have in the country”, he said.
According to the director, Google for Startups heard from many Black entrepreneurs that one of their main obstacles to the growth of their businesses is access to capital under fair conditions. “All of this brought us to the certainty that it was necessary to act. Google for Startups wants to be an active agent in this transformation and in building a more diverse and inclusive startup ecosystem in Brazil.”
So far, the selected startups range from gaming, fashion tech, proptech, legal tech to health tech. “I am particularly excited about the geographic diversity among the investees. They are companies from five Brazilian states: Bahia, Minas Gerais, Paraná, Rio de Janeiro, and São Paulo. We want to reach the largest number of regions with the Black Founders Fund to encourage Black entrepreneurship in the country as a whole”, he says.
The Black Founders Fund is different from Google for Startups programs because it works as a financial support fund and does not provide a schedule of training and workshops. But, according to Barrence, the fund will be an ally of invested startups throughout their journey. “Our goal is to support these founders and their teams and, for that, we will make our products, technologies, and specialists available to them. Also, our network of specialists will always be available, as well as startups that have already passed through our programs.”
To participate, interested parties can register or nominate startups using a form available on Black Founders Fund’s website during the entire active period of the fund. In addition to seeking a round of seed investment to finance the next stage of development, companies that want to participate in the fund must offer a solution created based on technology and already have a business in operation, that is, they must already have a product launched with some users and potential customers. Entrepreneurs also need to indicate how they plan to use the money.